Romania negotiates EUR 1 billion credit line with World Bank

Negotiations for a new EUR 1 billion credit line between Romania and the World Bank will most likely run until the end of April, said Stefan Nanu, Romania's representative with in the World Bank. According to Nanu, the actions agreed must be completed by the end of May, with reforms in energy, public finance and health lined up before the debate by the World Bank board.

“Romania has chosen this tool because of the specific market context and because of the uncertainties that still persist globally and regionally. The objective is to facilitate the access to international capital markets, given that Romania intends to access these markets constantly and under reasonable terms, as well as strengthening the liquidity buffer”, said Nanu in an interview for local daily Ziarul Financiar. The loan will cost Romania a commission of 0.25 percent – the regular World Bank fee, as well as a stand-by fee of 0.5 percent for money that is not taken from the loan, which is paid until Romania cashes in the money. With this new agreement, Romanian authorities ensure funding for the next three years, while agreeing to a three-sector program. According to Nanu, the measures featured in the agreement with the World Bank will be in line with those from the agreement with the International Monetary Fund (IMF) and European Commission, “Most of the measures are not new. There will probably be some more sophisticated measures that are not necessarily reflected in agreements with the IMF and the EC,” the World Bank representative said. Romania currently has a stand-by agreement with the IMF, the European Commission (EC) and World Bank, for a total of EUR 3.6 billion, which was approved a year ago. The country does not intend to draw any money, as it continues to consider the deal as precautionary. Earlier this year, the IMF agreed to disburse an additional EUR 505 million for Romania, after the fourth review, bringing the total resources that are currently available to the country to about EUR 2 billion. Ioana Toader, ioana.toader@romania-insider.com